CHANGES in the make-up of the beef trade to Mexico indicating more of a taste for premium product augurs well for Australia, which appears to have already taken some advantage of opportunities arising from the drawn-out North American free trade negotiations.

While it is early days, there has been an increase in chilled beef going to Mexico and diversification of cuts, Meat and Livestock Australia’s business manager for North America Rob Williams reports.

MLA data shows to the end of July, Australia had already sent 132 tonnes of chilled product to Mexico, which was double the trade for the whole of 2015 and 2016 and an increase from 2017.

Mr Williams points out that was from a very low starting base, given Mexico went from being a moderately important market to a market of negligible volume on the implementation of the North American Free Trade Agreement in 1994.

“We are also starting to see some cut diversification, though thin flank still dominates,” Mr Williams said.

“This year, striploins, ribeye and rump cuts have been sent to Mexico, which is a first in recent years. In addition, premium Australian beef is starting to appear at high-end steak restaurants such as Harry’s and Cambelache.”

Meat and Livestock Australia's North America expert Rob Williams.

Rabobank’s latest Beef Quarterly reports Mexico continues to expand its beef production and is closing the gap between its exports and imports.

From January to June, Mexican exports totalled 113,000 tonnes while imports were 96,000t, creating a gap less than half that of the same period in 2017.

Ahead of the NAFTA renegotiations, the Mexican Government early last year provided a tariff-free quota of 200,000t for non-NAFTA countries until December next year, which could be extended depending on usage of the quota.

Anecdotally, key stakeholders in Mexico seemed optimistic the tariff elimination would be extended for non-NAFTA countries, though there were no guarantees, Mr Williams said.

Regardless, the Trans-Pacific partnership, known as TPP-11, provides for tariffs on Australian beef to Mexico to be eliminated within ten years of implementation.

Mr Williams said the key opportunities for Australian beef in Mexico were at the premium end of the market - either high-end food service, such as fine steakhouses, in premium Mexican cuisine or at high-end retail.

Both grain-fed beef, whether it be Wagyu cross or British breeds, or premium grass-fed, would appeal to the high-end consumer looking for something different, he said.

“Given the rise in incomes of the middle class, the younger demographic in Mexico and the relatively high level of spending within food service, the future is very bright for the beef and sheep meat trade to Mexico,” he said.

“While it is unlikely to be a high volume market like Japan, the United States or Korea, we may see a modest growth of volume to this market in the medium to long term, largely in premium Australian beef products, and that makes it a vital market for the future.”